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A modified version of Chairman Ron Wyden's (D-OR) Clean Energy for America Act that includes an expansion of the Section 48C 30% advanced energy manufacturing credit was the subject of a tie 14-14 vote in the Senate Finance Committee May 26, with all Republicans opposed over issues including proposed repeal of fossil fuel incentives. Under the organizing agreement reached in February given the 50-50 Senate, there is a mechanism for leaders to make a motion to discharge a measure subject to a tie in committee and bring it to the floor. (Note Committee amendment votes resulting in a tie are not agreed to.)

The exact outlook for the Wyden bill isn't clear: Democrats want to move clean energy provisions with an infrastructure package; the broader outlook for infrastructure isn't clear, nor is whether Republicans could support any clean energy provisions; and House Democrats take a different approach than the Senate by expanding and extending provisions in the current system.

The Clean Energy for America Act would consolidate current renewable energy tax provisions to provide incentives for:

- clean electricity, either as a production tax credit or an investment tax credit;

- clean transportation, including eliminating the EV credit's per-manufacturer cap and creating a new credit for commercial electric vehicles; and

- energy efficiency for homes, residential buildings, and commercial buildings.

Chairman Wyden's mark includes direct payment as well as wage and worker classification rules to qualify for certain incentives. The modified mark adds bonuses to the PTC and ITC for nascent technologies, energy communities that have experience a loss in energy industry jobs and meeting certain domestic content requirements. On EVs, the modification includes two $2,500 credit bonuses based on organized labor and domestic assembly qualifications. It also expands the proposed EV credit for cargo vehicles to vehicles like buses, boats, and forklifts. New provisions under the modification add a clean hydrogen production credit and bonds for carbon capture and storage and direct air capture projects, as a replacement for Clean Energy Bonds, which were struck.

Ranking Member Mike Crapo (R-ID) said the current energy tax system needs change and Congress should not pick winners and losers through the annual tax extenders process, but Republicans cannot support a package that eliminates fossil fuel provisions and addresses labor policy. Senator John Cornyn (R-TX) said Texas is the #1 producer of electricity from wind in addition to its robust oil & gas industry, and he opposed the tax increases in the Wyden bill. His amendment to require EVs from certain countries be ineligible for credit was accepted by Chairman Wyden and subsequently backed 26-0 by the Committee.

Senator Sheldon Whitehouse (D-RI) repeated, as he announced yesterday, that Chairman Wyden is trying to put together a proposal for a price on carbon emissions.

The mark includes the Stabenow-Manchin extension and modification of the Section 48C 30% credit for investment in qualified property used in a qualified advance energy manufacturing project including re-equipping an industrial facility with equipment designed to reduce greenhouse gas emissions. It also would end fossil fuel provisions. The overall score after including offsets and modifications is nearly $260 billion/10 years. The package also includes a living wage requirement for facilities to qualify for the tax credits in a section titled "Workforce Development Requirements."

Materials are available here.

Additional information is available in the attached Tax Alert.

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Wyden Clean Energy bill